104 New Japanese PM visits China before US

(1) New Japanese PM visits China before US
(2) Recovery Picks Up in China as U.S. Still Ails
(3) Uighur leader invited to Taiwan; China urges Gov't not to issue a visa
(4) State-owned Chinese steelmaker blocked from mining project in South Australia
(5) Australia defends military block to China investment
(6) India's Organic Farmers escape Suicude epidemic

(1) New Japanese PM visits China before US

Cautious welcome for Japan's Asia drive

By Jian Junbo

http://www.atimes.com/atimes/China/KI24Ad01.html

Sep 24, 2009

SHANGHAI - It seems Japan's foreign policy is at a turning point as Yukio Hatoyama of the Democratic Party of Japan (DPJ) takes over as the nation's new prime minister. In accordance with the DPJ's platform in election campaigns, the new ruling party is likely to attach less importance to the United States-Japan relationship and seek a more independent role for Japan in international society; or, at least, the DPJ may want to reduce the dominance of the US in Japan's foreign policy.

Hatoyama this week met Chinese President Hu Jintao in New York on the sidelines of a United Nations conference to improve ties between the two countries. Hatoyama will also pay a state visit to China after the UN meeting. He is reportedly eager to discuss with Chinese leaders the formation of a so-called East Asian community, an idea that was highlighted in the DPJ's election platform as a key point of its foreign policy.

This is a break from the tradition in Japanese diplomacy in which a newly sworn-in Japanese prime minister first visits the US before going to other countries, such as China. This indicates the new Japanese government is preparing to adjust a foreign policy stance the country has adopted since the end of the Cold War.

One-and-a-half centuries after Japan renounced its Asian identity to "join" Europe or the West, it seems now it wants to return to Asia. Here, a brief historical review may help to better understand the DPJ's policy.

In the 1850s, when Japan was still a vassal of the Qing Dynasty in China, Japan was threatened and even invaded by Western imperialists and colonists who imposed unequal treaties on it. For example, in 1853, a US fleet invaded Japan and made it a semi-colonized county after signing an unequal bilateral trade treaty.

During that period, the Qing imperial government could not prevent Japan from being exploited and oppressed by Western imperialists and colonists, since China was unable to protect itself when encountering similar attacks from the West. To remove foreign imperialists and become stronger, Japan started far-reaching, top-down social and political reform.

This was the Meiji Restoration, which was generally based on the thoughts of modern Japanese enlightenment philosophers, especially Fukuzawa Ykichi, who was among the first to advocate the idea of Japan departing from East Asia to join the West or Europe. The Meiji Restoration, which started in 1868, strengthened the power of the Japanese emperor and some noble families but also in effect paved the way for Japan to take the road towards modernization, economically, militarily and socially.

It is regretful that Japan's modernization was accompanied with militarist expansion and the invasion of Korea and China. In the 1890s, Japan made Korea its colony and it snatched China's island of Taiwan after defeating China in 1895.

Japanese expansion into Asia didn't stop until the end of the World War II in 1945, when US troops landed in the archipelago country and ultimately occupied it. Afterwards, Japan started reforms based totally on Uncle Sam's will; namely, its political and economic system was quickly transformed to be a part of the US-led capitalist world.

Shortly after the Cold War broke out, and then the Korean War in the early 1950s. Japan bonded with the US and the Western camp, its economic rise benefiting much from its close ties with the West and especially from the demands of the US military/industrial complex. At the end of the Cold War, typically as a member of the Group of Eight (G-8), Japan was regarded as a Western state by foreigners, as well as by itself.

That is, the radical reform started in the latter half of the 19th century made Japan an "outstanding student" in learning Western modern technology and ideas, beating other Asia countries in the competition. This augmented its desire and boosted its confidence in getting away from Asia and joining the club of the West. And it succeeded.

Now, as a member of the G-8, Japan is more a part of the West than of Asia - politically, diplomatically, economically and psychologically, despite its geological location.

However, after the end of the Cold War some 20 years ago, a few Japanese political elites began advocating a Japanese comeback in Asia, while preserving its Western identity. What made the Japanese elites feel this way?

First, after Japan accepted the Plaza Accord in 1985 - in which the US forced the drastic revaluation of the Japanese yen to make Japanese imports more expensive to American consumers and reduce its trade deficit with Tokyo. And then the Washington Consensus in the 1990s, a term coined by US economist John Williamson in 1989, centered around privatizing state-owned enterprises, reducing state deficits and taxes and liberalizing interest rates, Japan's economy unfortunately came to a standstill or even recession that lasted for almost two decades.

This economic recession (or slowdown) proved a hotbed of growth for Japanese nationalism, with demands for a more independent status when dealing with the US and other foreign countries. This public feeling, combined with some politicians' ambition, was expressed even in the 1980s before the end of the Cold War. (Former Japanese prime minister Yasuhiro Nakasone proclaimed that Japan had started on a new path to become a "political power" in the world.) And it encouraged the Japanese to strive to become a so-called "normal state" in the international community.
Given this, it's not difficult to understand the Japanese desire to become independent from the US and more active in international affairs as a sovereign state.

Second, after the end of the Cold War, Asia gradually became a region that the international community could not ignore when dealing with important transnational issues. In particular, with the rise of newly industrialized countries and regions such as Singapore, Malaysia, Taiwan, South Korea and China, the East Asia from which Japan originally wanted escape is now important for its economic restoration and development.

For example, China is now Japan's biggest economic partner and the Chinese economy is significant for Japan's economic revival. East and Southeast Asia are attractive to Japan, and it will lose its influence in these promising regions if it does not re-engage them.

Third, in recent years, the US has been busy with its "war against terror" and it can no longer worry too much about Japan's concerns, especially "threats" from North Korea. Because of the failure of the six-party talks on North Korea's nuclear program, Japan is increasingly worried about threats to its territorial and civic security from North Korea, a nuclear state.

Meanwhile, Japan is also worried about China's steady expansion of its military capability, although its concerns are hardly based on substantial facts. When its powerful ally - the US - ignores its concerns, Japan has to resort to its own measures.

In sum, in the post-Cold War era, with the change in geopolitical politics and international economic conditions in East Asia and with the relative decline of US power, Japan is more and more anxious to boost its international status and national interests in East Asia.

If the US is unable to meet Japan's demands for its national security and interests, it needs greater independence, which means it will loosen links with the US and focus more on Asian affairs and its relations with China, the two Koreas and the 10-member Association of Southeast Asian Nations.

But Japan's bid to rejoin Asia is not a simple matter; there will be difficulties.

First, the US will be vigilant about Japan's concept of an East Asian community - a strategy commonly considered as Japan's main reason to rejoin East Asia. The US will not let Japan break away from the US orbit, as the US-Japan alliance was a foundation of the US maintaining its international dominance in the post-Cold War era.

Japan and South Korea are two pillars of US hegemony in East Asia. Not only can such an alliance be a deterrent to China, and provide support for Taiwan psychologically and militarily, it can also restrict Japan from becoming an independent political and military power that could challenge US dominance in the region.

In this regard, new Japanese Foreign Minister Katsuya Okada said he would try his best to strengthen the bilateral relationship when he met US Assistant Secretary of State Kurt Campbell last week. This also reflects Japan's difficulty and confusion in balancing two identities - Asian and Western.

Second, China will be suspicious of Japan's demands for more independence. China benefits from the US-Japan alliance because this keeps in place Japan's pacifist constitution and prevents Japan's military from rising. If Japan seeks more independence in rejoining East Asia, it will change the geopolitical politics and disrupt the balance of power in East Asia.

Historically, the China-centric tributary system that functioned before the 1850s was the dominant transnational system in East Asia in which only one country was the leader - the others were vassals. This historical influence still exists. It implies that an independent Japan will compete with China for the leadership or dominance of East Asia.

The DPJ's policy to build an East Asian community might make people think of the militarist "Greater East Asia Co-Prosperity Sphere" slogan which was popular in the 1930s and 1940s during Japan's dominance in Asia - to some degree it was the worst copy of the tributary system. No one can be sure the DPJ's strategy is not to build a "neo-tributary system" with Japan at the center. Japan tried to do that after the Ming Dynasty, though it failed.

Accordingly, Japan cannot succeed in rejoining Asia unless it can allay the suspicions of both the US and China. And first, some practical aspects have to be addressed before it can rejoin Asia.

The first issue relates to the US. The US will not want Tokyo to undermine this alliance, and anyway, the disruption of this alliance cannot happen overnight. So the pragmatic approach for Japan is to slowly change the overall relationship.

Japan can still assist the US in areas such as anti-terrorism and non-traditional security. At the same time, if the US-led alliance cannot provide a comprehensive defensive umbrella, Japan can resort to a mechanism similar to a collective security regime for its defense - this would also help ease China's suspicions over its intentions for greater independence.

This mechanism, in place of the six-party talks, could include all the countries involved, including the two Koreas, China, the US and Russia, although this will not be easy. Finally, Japan's historical disputes with the Chinese and Koreans will have to be resolved before it can rejoin Asia. Clearly, a Japan that cannot face its history will not be accepted by its neighbors as a legitimate member of East Asia, either in a political or psychological sense.

Dr Jian Junbo is assistant professor of the Institute of International Studies at Fudan University, Shanghai, China.

(Copyright 2009 Asia Times Online (Holdings) Ltd. All rights reserved. Please contact us about sales, syndication and republishing.)

(2) Recovery Picks Up in China as U.S. Still Ails

From: IHR News <news@ihr.org>  Date: 25.09.2009 06:15 PM

By KEITH BRADSHER

September 17, 2009

http://www.nytimes.com/2009/09/18/business/global/18yuan.html

Models of real estate projects at a fair in Shenyang, China, on Tuesday. Investors' interest in the real estate market is picking up as economic growth returns across the Chinese economy.

WUXI, China — Just eight months ago, thousands of Chinese workers rioted outside factories closed by the global downturn.

Now many of those plants have reopened and are hiring again. Some executives are even struggling to find enough temporary staff to fill Christmas orders.

The image of laid-off workers here returning to jobs stands in sharp contrast to the United States, where even as the economy shows signs of improvement, the unemployment rate continues to march toward double digits.

In China, even the hardest-hit factories — those depending on exports to the United States and Europe — are starting to rehire workers. No one here is talking about a jobless recovery.

Even the real estate market is picking up. In this industrial town 90 miles northwest of Shanghai, prospective investors lined up one recent Saturday to buy apartments in the still-unfinished Rose Avenue complex. Many of them slept outside the sales office all night.

“The whole country’s economy is back on track,” said Shi Yingyi, a 34-year-old housewife who joined the throng. “I feel more confident now.”

The confidence stems from China’s three-pronged effort — a combination of stimulus, liberal bank lending and broad government support for exports.

The Chinese central bank said the country’s economy surged at an annualized rate of 14.9 percent in the second quarter. The United States economy shrank at an annual rate of 1 percent in that period.

“So often China and the U.S. are mixed together as being in the same situation, and that is totally wrong,” said Xu Xiaonian, an economist in Beijing with the China Europe International Business School.

That does not mean the two nations are not connected, of course. China’s rebound in growth may slow if the American economy does not pick up. China needs the United States to buy its goods, and the United States needs China to continue to buy its debt.

This mutual dependence makes it harder for either country to let the current dispute over Chinese tires and American chicken and auto parts to grow into a trade war.

But with more centralized economic planning than the United States, China has been able to disburse its stimulus much faster, turning it into new rail lines and highways.

China’s finance ministry announced in late June that half the $173 billion in central government spending had already been allocated to specific projects. The White House said in early July that a quarter of the spending authority and tax cuts in the $789 billion American stimulus had been allocated or used.

But even more key to China’s recovery, economists say, are two other government efforts that are paying big dividends: looser lending and export supports.

The state-controlled banking system here — which breezed through the global financial crisis with minimal losses as American financial institutions reeled — unleashed $1.2 trillion in extra lending to Chinese consumers and businesses in the first seven months of this year. That money is financing everything from a boom in car sales, up 82 percent in August from a year earlier, to frenzied factory construction.

Beijing also has given huge tax breaks and other assistance to exporters. They include placing broad restrictions on imports and intervening heavily in currency markets to hold down the value of the renminbi, to keep Chinese exports competitive even in a weakened global economy.

Indeed, subsidies abound at all levels of government: the Wuxi municipal government just offered up to $146,000 to each local business that increases exports in the last three months of this year.

To be sure, not all the laid off workers throughout China have been hired back.

“Some plants reduced worker numbers by 20 to 30 percent, now they hire back 10 percent,” said Stanley Lau, deputy chairman of the Federation of Hong Kong Industries, which represents export-oriented factories employing 10 million Chinese workers.

Hilda Wang contributed reporting to this article.

(3) Uighur leader invited to Taiwan; China urges Gov't not to issue a visa

Kadeer accepts invite to Taiwan

By Xie Yu (China Daily)

Updated: 2009-09-24 08:17

http://www.chinadaily.com.cn/china/2009-09/24/content_8728812.htm

Cross-Straits relations are facing yet another test as Uygur separatist Rebiya Kadeer has accepted an invitation to visit Taiwan, less than one month after the Dalai Lama's visit to the island.

The invitation was extended to Kadeer by the Taiwan Youth Anti-Communist Corps following a telephone discussion with Kadeer on Tuesday, AFP reported yesterday.

"Kadeer expressed her thanks for the invitation and said she will certainly visit Taiwan," Marie Lin of the organization was quoted as saying.

The pro-independence Corps, founded in June, is backed by Taiwan's pro-independence opposition Democratic Progressive Party (DPP).

"Rebiya Kadeer hopes to be able to carry out face-to-face exchanges with various groups in Taiwan," said Dilxat Raxit, a Sweden-based spokesman for the World Uygur Congress, which Kadeer heads.

He said the timing of the meetings depend on Taiwan's ability to carry out "flexible and active diplomacy".

The island's "premier" Wu Den-yih said a decision on the visit would be announced by the end of the week.

The invitation puts Taiwan's government - voted to power last year on a promise to improve ties with the mainland - in a no-win situation, according to analysts.

If Taiwan's government grants a visa to Kadeer, who is alleged to have orchestrated the deadly July 5 riot in the Xinjiang Uygur autonomous region, the mainland will be infuriated, while pro-independence groups at home and rights groups abroad will be angered if she is not, experts said.

"This is a decision-making dilemma for the government as whatever it does there will be criticism," said George Tsai, a political scientist at Chinese Culture University in Taipei.

China protested a visit by the Dalai Lama to the island in late August in the wake of Typhoon Morakot.

"But the difference is Kadeer does not have a shield of religion," said Ni Yongjie, an expert from the Shanghai Institute of Taiwan Studies.

"It will make things ugly if  (Taiwan leader) Ma Ying-jeou approves the visit and provides the island as a base for activity for Kadeer," he said.

Ma has been pushing for closer cross-Straits ties since coming to power last year.

On the other hand, the DPP is struggling for attention by destroying cross-Straits ties, he said.

"One thing for sure is that the peaceful development of cross-Straits relations can't be changed, but I think it's time for both sides to build channels for political communications," Ni said.

He stressed that it is improper for Ma to repeatedly test the mainland's tolerance, and both sides should have a mechanism to tackle difficult issues.

Tsai warned that the mainland could punish Taiwan by not signing a trade pact or financial cooperation agreement or by vetoing Taiwan's plan to join specialized United Nations agencies.

Beijing is already simmering over the screening this week of a documentary about Kadeer in Kaohsiung, Taiwan's second-largest city, triggering a wave of cancelled hotel reservations by mainland tour groups.

Taiwan media reported more than 3,000 hotel reservations were canceled in Kaohsiung, the second largest city in Taiwan, during September.

At least 200 reservations for October have also been called off, and booking is scarce for the mainland's Oct 1 National Day holiday, the Taipei-based China Times reported.

The paper quoted unnamed tourism operators as saying the cancellations have caused an estimated 6 million New Taiwan dollars ($185,000) in lost revenue.

Wu Rong-yuan, chairman of Taiwan's Labor Party, said both the DPP and Ma Ying-jeou should learn a lesson from the Dalai Lama's visit.

"Taiwan doesn't want to be placed in the shadow of violence," he told China Daily.

"It is not only sensitive, it is total political intrigue which does nothing good for the people of Taiwan. I hope the government doesn't permit it," he said.

(4) State-owned Chinese steelmaker blocked from mining project in South Australia

Defence moves to block Chinese steelmaker

Sarah-Jane Tasker | September 24, 2009

http://www.theaustralian.news.com.au/business/story/0,28124,26117443-5005200,00.html

THE Defence Department has again flexed its muscles, this time to try to stop a state-owned Chinese steelmaker gaining access to a mining project in South Australia, because of national security concerns.

Iron ore junior Western Plains Resources said yesterday it was surprised by Defence's objection to its $45million deal with Wugang Australian Resources and would seek a government response on the issue.

Western Plains Resources signed the deal in May with Wugang Australian Resources, a subsidiary of Wuhan Iron and Steel Company, for a 50 per cent interest in the miner's Hawks Nest project in South Australia, in the Woomera Prohibited Area -- a weapons-testing range.

But Wayne Swan made it clear he does not want the Chinese to control assets in the Woomera area when he rejected a Chinese play for the struggling OZ Minerals earlier this year, because its Prominent Hill mine was in the prohibited zone. The knockback forced a new deal, with OZ Minerals retaining the massive copper-gold mine.

When announcing the WISCO deal, Western Plains executive chairman Bob Duffin said it had been designed to address defence concerns, and the company was confident of approval.

Executive director Heath Roberts said the letter from the Defence Department, received last Friday, was a surprise as the company understood it was in constructive discussions with the department and open to negotiating a suitable outcome.

"We were very confident we were going to get there," he said.

In a preliminary meeting, the Foreign Investment Review Board requested the Chinese company seek Defence Department approval before the final application was submitted.

Western Plains Resources said yesterday it had advised WISCO -- China's third-largest steelmaker -- still to lodge its FIRB application. "We want to see a more transparent whole-of-government consideration on the issues because it goes just beyond defence considerations," Mr Roberts said. Without the Chinese investment, Hawks Nest would be very hard to fund.

The prohibited area covers 127,000sqm -- about 13 per cent of South Australia -- in which there are more than 120 active exploration leases, and two successfully operating mines at Challenger and Prominent Hill.

Defence Minister John Faulkner said the department had been in negotiations with Western Plains about the project since 2007, but at no stage confirmed an approval would be granted. "Indeed, there have been numerous indications given to the company that access would be highly unlikely, given the location of the Hawks Nest tenement is on the centre-line of the test range," he said.

Senator Faulkner said a number of companies with interests in the Woomera area had been approached by foreign interests. "As the activities conducted on the Woomera test range are sensitive, all such cases raise potential national security issues which require consideration."

The South Australian government will seek a resumption of negotiations to resolve the issue.

(5) Australia defends military block to China investment

(AFP) – September 24, 2009

http://www.google.com/hostednews/afp/article/ALeqM5iKqvcVuSeXwx57tjzq0SuuNUXM3w

SYDNEY — Australia's defence minister on Thursday stood by national security objections to a Chinese steelmaker gaining access to a mining project on a sensitive rocket-testing site.

John Faulkner said the defence department had every right to block China's Wuhan Iron and Steel Co (WISCO) from gaining a 50 percent stake in Western Plains Resources' Hawks Nest magnetite iron ore project.

The Hawks Nest development is in South Australia's Woomera Prohibited Area, where Australia's Army carries out secret weapons testing.

Treasurer Wayne Swan in March knocked back a takeover bid by China's Minmetals for OZ Minerals because its flagship Prominent Hill project was in the Woomera zone.

Western Plains executive director Heath Roberts hit out at the rejection, calling it a "gross overreaction".

But defending the move, Faulkner said Hawks Nest fell within the testing range's most sensitive area, and Western Plains had always been advised that access was "highly unlikely" on national security grounds.

"The location of the Hawks Nest tenement is inherently dangerous and very sensitive, the most sensitive part of the range," Faulkner told state radio.

"The issue here for defence is very much where the mine is located, that's the critical point."

"The Woomera test range is a significant contributor to Australia's defence capability and that of our allies," he added.

Roberts said WISCO had been instructed by the foreign investments watchdog to seek military approval before it would consider the application.

"I think our proposal, which would have seen the Chinese group WISCO acquire 50 percent only of the project and which had some critical checks and balances to see that the defence's interests weren't jeopardised, ought to have been considered differently," he said.

"We had meaningful and very constructive discussions underway with defence up until last week in fact, so this rather precipitous (rejection) letter really did come out of the blue," he added.

Roberts said Western Plains had strongly advised WISCO to proceed with its formal foreign investments application to obtain a "whole of government" decision.

Australia approved a revised Minmetals bid for OZ in April after the Prominent Hill project was excluded.

(6) India's Organic Farmers escape Suicude epidemic

http://online.wsj.com/article/SB125119426057556421.html

AUGUST 25, 2009

Organic Farmers Seek Healthier Future

By LINDA BLAKE

VIDARBHA, India -- The hills of northeastern Maharashtra are normally green and lush during the annual monsoon season. But this year's spots of brown are a sign of a trouble.

In this region known as the suicide belt, the combination of poor rains, high production costs for farming, low crop yields and crippling debt can be fatal. Some 16,000 farmers commit suicide every year in India, according to India's National Crime Records Bureau. About a quarter of them are in Vidarbha. In July alone, 36 people died here.

But as laborers pluck weeds from fields of cotton, soybeans and pulses in this part of western India, Havantro Deshmukh believes he has the answer. Mr. Deshmukh made his farm organic nearly a decade ago. Since then, a consistent profit has helped him to "escape debt," he says, and possible death.

Valued at $20 million, India's organic farming sector is a sliver of the $26 billion global market. But with its promise of higher profit margins and lower production costs, organic farming provides an alternative to this debt spiral by eliminating a farmer's dependence on expensive pesticides.

"No tension," says Mr. Deshmukh with a toothy grin.

Another farmer, Vasant Pohekar, aged 54, made his 25-acre farm chemical-free two decades ago. As the founder of the Organic Farming Research and Development Association, he has since introduced 5,000 local farmers like Mr. Deshmukh to organic farming.

"The first year was a bit hard but we started seeing profits from the second year onwards. We didn't get a grip on it until the seventh year," he explains.

Even today, his yield is lower compared to farms that use pesticides. This is primarily due to crop-rotation which restricts the amount of farmable acreage each season. However, his production costs have shrunk by a third. He's no longer subjected to high up-front rates for chemical fertilizers and insecticides. In addition, he draws healthy seeds directly from the previous year's crop rather than invest in genetically modified ones. Plus, cutting out middle-men and selling his products directly to textile mills across the country earns him 20% more for his organic cotton, he says. His margins for cotton farming are now 75%, he says, compared to the 40% average in India.

As a result, Mr. Pohekar says, annual profits have gone up.

Mr. Pohekar appears unfazed by this summer's lack of rain that has led to half of India's states being declared drought-affected. Organic methods, like water conservation, make him resistant to a crop-crash, he says. This is because organic soil is infused with nutrients which boost water absorption during rainfall by an estimated 16,000 gallons per acre. Low rainfall still affects all farms, he concedes, but the issue is how prepared farmers are for it psychologically.

False hopes placed on pesticides as key to high output takes a toll on their psyches. "The main reason behind farmer suicides are advertisements which encourage him to spend more on pesticides for his farm," he says.

Mr. Pohekar says that 313 farmers in his collective are certified by Germany's Ecocert, an international inspection and certification agency for small farmers. This certification is a necessary requirement before exporting mills even consider purchasing a farmer's product.

Yet, there are still big barriers to entering the market. The certification fee is anywhere from $400 to as much as $2,000 annually, a fortune for a farming family that earns about $720 in a year. And the years it can take to get a farm up to organic standards discourages small farmers with no financial cushion to take such expensive risks.

The Indian government could also be doing more, insists Mr. Pohekar. State subsidies, like those used by American and European farmers, could help debt-ridden smallholders with less than five acres to turn a profit, he says.

If farmers are given subsidies to cover profit-loss during their initial shift to organic farming -- instead of applying for existing government debt-relief schemes that help pay off creditors but don't encourage production -- this could give them a shot at "a healthier, more profitable future," argues Mr. Pohekar. The government could also endorse the health benefits of eating organic, he says.

"If the government really promotes this," says Mr. Pohekar "then it is my firm belief that the suicides will completely stop happening in my district."